Sony's FTA edge turns LG, Samsung, Videocon into pout potatoes

By Writankar Mukherjee, ET Bureau | 15 Jul, 2013, 07.27AM IST

KOLKATA: Consumer electronics majors LG, Samsung and Videocon have ganged up to put pressure on the government to stop ace rival Sony from importing flat-panel television sets from Thailand and Asean countries under free trade agreements arguing such imports do not fulfill 'nil' or concessional duty norms.

LG, Samsung and Videocon, under the aegis of apex industry body Consumer Electronics and Appliances Manufacturers Association (CEAMA), have written and made representation to the ministries of commerce, finance, communications and IT, saying Japanese companies like Sony and Toshiba do not fulfill the value addition norms specified under the free trade agreements (FTAs) and yet enjoy nil or concessional duty, creating an uncompetitive business environment for domestic manufacturers.

"Domestic manufacturers like us are suffering with 10-12 per cent margin disadvantage against few Japanese companies, which is pinching us when the market has become so competitive and the fall of rupee is creating additional pressure," says R Zutshi, Samsung India deputy managing director, who is leading the cause under CEAMA. "The current policy does not promote domestic manufacturing but import of completely built units at zero or concessional duty," he says.

The development comes at a time when Japan's largest electronic exporter has become extremely aggressive in India after the country became its fourth largest market globally. CEAMA, in its representation, pointed out that around 60-65 per cent of a flat panel television cost is the panel and another 20 per cent is the IC and other parts which, in the case of Sony, are not manufactured in Thailand or ASEAN countries. Only the sets are assembled in those countries at lower labour cost, which means there is no value addition in the import source, it argued.

Source: http://economictimes.indiatimes.com/news/news-by-industry/cons-products/electronics/free-trade-wars-sonys-fta-edge-turns-lg-samsung-videocon-into-pout-potatoes/articleshow/21076676.cms

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